Kingsway Announces Closing of Rights Offering, Early Partial Redemption of its 2014 Notes and Changes to its Board of Directors

Closing of Rights Offering generating approximately US$13.1 million of
proceeds

Partial, early redemption of outstanding 7.50% Senior Notes due 2014 of
US$12 million at par plus accrued interest

Addition of Larry G. Swets, Jr., President and CEO, to the Board of
Directors

Appointment of Director Terence Kavanagh as Chairman following
resignation of Spencer Schneider

Closing of Rights Offering

The subscription period for the previously announced rights offering
expired at 5:00 p.m. (Eastern) on September 6, 2013. Subscription
rights to purchase 3,280,790 units were exercised, resulting in gross
proceeds to Kingsway of approximately US$13.1 million before expenses
of the rights offering. The rights offering was made in the United
States pursuant to a registration statement on Form S-1 that was
previously filed with the Securities and Exchange Commission and became
effective on July 24, 2013. The rights offering was made solely by
means of a prospectus in the U.S. and a rights offering circular in
Canada.

Early Partial Redemption of Notes

As stated in the rights offering prospectus and rights offering
circular, the Company's intended use of proceeds was the redemption of
the 7.50% Senior Notes due February 1, 2014 ("Notes") which are
obligations of Kingsway's subsidiary Kingsway America Inc. ("KAI") and
of which Kingsway is a guarantor. As a result, Kingsway has decided to
immediately apply the net proceeds of the rights offering toward a
partial early redemption of the Notes. KAI gave notice to The Bank of
New York Mellon Trust Company, N.A., as trustee, of such redemption.
The early partial redemption is expected to take place on October 15,
2013 in the amount of US$12,000,000 at par plus accrued interest of
US$185,000, resulting in an aggregate principal amount of US$14,356,000
of Notes to remain outstanding after such early partial redemption.

Resignation of Chairman and Director Spencer Schneider

The Company also announced that Mr. Spencer Schneider has resigned from
the Company's Board of Directors. Mr. Schneider, who also served as the
Company's Chairman of the Board, was originally elected to the
Company's Board of Directors in April 2009. "We want to thank Spencer
for his service to the Company" stated Larry G. Swets, Jr., President
and CEO. "He has invested his valuable time, talent and passion into
the Company, for which we are thankful. Under his helm, we were able
to resolve many legacy Kingsway issues and position the Company for
future success."

Appointment of New Chairman and New Director

Finally, Kingsway announced that Mr. Terence Kavanagh has assumed the
additional role of Chairman of the Board and that Mr. Larry G. Swets,
Jr., its President and CEO, has been appointed as a director, both
effective immediately. "Without question, Larry's leadership has been
instrumental in Kingsway tackling its many legacy issues. Having Larry
join the Board is further evidence of our confidence in his abilities,"
stated Chairman Terence Kavanagh.

About the Company

Kingsway is a holding company functioning as a merchant bank with a
focus on long-term value-creation. The Company owns or controls stakes
in several insurance industry assets and utilizes its subsidiaries,
1347 Advisors LLC and 1347 Capital LLC, to pursue opportunities acting
as an advisor, an investor and a financier. The common shares of
Kingsway are listed on the Toronto Stock Exchange and the New York
Stock Exchange under the trading symbol "KFS."

Forward-Looking Statements

This press release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934 that are not historical facts, and
involve risks and uncertainties that could cause actual results to
differ materially from those expected and projected. Words such as
"expects", "believes", "anticipates", "intends", "estimates", "seeks"
and variations and similar words and expressions are intended to
identify such forward-looking statements. Such forward-looking
statements relate to future events or future performance, but reflect
Kingsway management's current beliefs, based on information currently
available. A number of factors could cause actual events, performance
or results to differ materially from the events, performance and
results discussed in the forward-looking statements, including, without
limitation, our potential inability to complete the proposed rights
offering. For information identifying important factors that could
cause actual results to differ materially from those anticipated in the
forward looking statements, please refer to the section entitled "Risk
Factors" in the Company's 2012 Annual Report on Form 10-K and its
Quarterly Report on Form 10-Q for the quarter ended June 30, 2013.
Except as expressly required by applicable securities law, the Company
disclaims any intention or obligation to update or revise any forward
looking statements whether as a result of new information, future
events or otherwise.